So to the extent that the experiment tells us anything about monetary regimes, it reinforces the case against anything like a new gold standard – because it shows just how vulnerable such a standard would be to money-hoarding, deflation, and depression.

So to the extent that the experiment tells us anything about monetary regimes, it reinforces the case against anything like a new gold standard – because it shows just how vulnerable such a standard would be to money-hoarding, deflation, and depression.

What his statement really is saying, "Anything like a new gold standard would completely undermine the ability of the financial instituions without a strong asset backing of their fractional reserves(really 0 or negative reserves in many cases), to continue to sell their 'toxic'(fake) securites. In the meantime profiting two to three fold by credit default swapping out that bad derivitive in another corrupt market. God forbid anything like bitcoin had the capability to deflate on its own merits without the need for such centralized authority to be able to profit off of its manipulation."

Edit; Atleast he was kind enough to link to James Surowiecki's article in there. ;p

If you're not excited by the idea of being an early adopter 'now', then you should come back in three or four years and either tell us "Told you it'd never work!" or join what should, by then, be a much more stable and easier-to-use system. - GAIt is being worked on by smart people. -DamienBlack

>The actual value of transactions in Bitcoins has fallen rather than rising.

Is there any data to support his claim he makes?

Depends on the timeframe you use. If you measure from the price peak, then transactions have fallen. If you measure from the beginning of the year, transactions are up significantly. Stats are always deceptive =)

On the transaction point, it's important to realize that as services consolidate the transactions visible to the blockchain may fall even though real transactions increase. For example all the trades between mtgox or instawallet or flexcoin accounts won't show up on the chain.

im a liberal and a bitcoin enthusiast, by the way krugman wasnt very hash on bitcoin especially compared to republican/conservative journals... he said it was a good investment for early adopters but didnt look realistic for a long term gain or viable as a replacement for the dollar... which is a pretty high bar

it really gets my goat when i see people turning everything into a political faction tribalist war or something

you should feel good inside that one of the smartest minds in economics looked into bitcoin seriously

As a currency, its value it deflating because more and more of the currency is being hoarded by a select few who are still delusional enough to believe that bitcoins would be a viable, useful currency. Right now it's just merely a highly efficient method of grifting wealth from one person to another.

As a currency, its value it deflating because more and more of the currency is being hoarded by a select few who are still delusional enough to believe that bitcoins would be a viable, useful currency. Right now it's just merely a highly efficient method of grifting wealth from one person to another.

It's already viable and useful for online gambling, since exchange rate fluctuations don't matter as much there. I doubt John Q Public will want it for buying groceries until the rate of production slows significantly and the exchange rate settles down. It's going to take years of early adopter cash-outs, bubbles, and crashes.